Meta Miss Sends Tech Stocks Falling, Trump Supreme Court Case

Bloomberg Audio Studios, podcasts, radio news. 0:00:11.000 --> 0:00:11.559 Good morning. 0:00:11.600 --> 0:00:14.400 I'm Nathan Hager and I'm Karen Moscow. Here are the 0:00:14.440 --> 0:00:15.920 stories we're following today. 0:00:16.160 --> 0:00:16.400 Karen. 0:00:16.440 --> 0:00:20.040 The drop in futures, particularly the Nasdaq futures, follows disappointing 0:00:20.079 --> 0:00:23.360 results from Meta Platforms. Shares of the Facebook parent are 0:00:23.400 --> 0:00:27.240 down thirteen percent in early trading. Meta forecast weaker than 0:00:27.240 --> 0:00:31.280 expected sales in the current quarter while targeting higher capital expenditures. 0:00:31.480 --> 0:00:34.320 Here's CEO Mark Zuckerberg on the company conference call. 0:00:34.840 --> 0:00:38.680 As we're scaling capex and energy expenses for AI, We'll 0:00:38.720 --> 0:00:42.240 continue focusing on operating the rest of our company efficiently 0:00:42.640 --> 0:00:46.480 but realistically. Even with shifting many of our existing resources 0:00:46.520 --> 0:00:49.800 to focus on AI, we'll still grow our investment envelope 0:00:49.840 --> 0:00:54.040 meaningfully before we make much revenue from some of these 0:00:54.040 --> 0:00:54.880 new products. 0:00:54.920 --> 0:00:58.000 CEO Mark Zuckerberg says Meta will spend billions of dollars 0:00:58.000 --> 0:01:01.720 more than expected this year, fueled by investments in artificial intelligence. 0:01:02.360 --> 0:01:05.000 Well, Nathan, the metamiss is sparking your sell off in 0:01:05.040 --> 0:01:08.160 some other high tech stocks this morning. Shares of Alphabet 0:01:08.200 --> 0:01:11.800 down about three percent. Microsoft is lower by almost two percent. 0:01:12.120 --> 0:01:14.880 Both companies report earnings this afternoon. 0:01:14.600 --> 0:01:16.920 And IBM shares are plunging as well care and they're 0:01:16.959 --> 0:01:20.040 down more than eight percent. That company's we consulting unit 0:01:20.160 --> 0:01:25.480 sales is disappointing investors, overshadowing IBM's acquisition of software firm Hashikorp. 0:01:26.040 --> 0:01:28.800 Well, Nathan, we also have a barrage of earnings overseas, 0:01:28.840 --> 0:01:33.760 particularly in the banking sector. Shares of barclayser up almost 0:01:33.800 --> 0:01:36.760 four percent. The British bank posted first quarter revenue that 0:01:36.880 --> 0:01:40.800 top analyst estimates. We spoke earlier with Chief executive Officer 0:01:41.000 --> 0:01:44.319 Csvan Kada Krishnan about the volatile rates market. 0:01:44.640 --> 0:01:47.320 It is very early. Our numbers are in line with 0:01:47.360 --> 0:01:50.720 what we said. We've seen deposit growth, we've seen lending 0:01:50.760 --> 0:01:53.600 growth in mortgages and in credit, and so we're pleased 0:01:53.600 --> 0:01:57.360 with that. But it's one quarter in a longer journey 0:01:57.400 --> 0:01:57.880 of three. 0:01:57.720 --> 0:02:02.000 Years in Barclays ceocs kind of. Krishnan says. Revenue tied 0:02:02.040 --> 0:02:05.240 to the company's investment banking businesses top estimates. 0:02:05.440 --> 0:02:08.560 Elsewhere in European banks, Karen Deutsche Bank saw seven percent 0:02:08.639 --> 0:02:11.840 jump in earnings from fixed income trading in the first quarter. 0:02:11.919 --> 0:02:14.120 That was more than analysts expected and better than most 0:02:14.160 --> 0:02:17.440 of the bank's biggest US rivals. Chief financial Officer James 0:02:17.520 --> 0:02:20.920 von Moltke hailed strong momentum in Deutsche's investment bank. 0:02:21.080 --> 0:02:23.560 We're very pleased with the results there, thirteen percent up 0:02:23.639 --> 0:02:26.680 year on year our fit business and also within that 0:02:26.720 --> 0:02:29.919 the financing business doing very well, so we see very 0:02:29.919 --> 0:02:34.720 strong momentum and client engagement there. We're also seeing resilience 0:02:34.919 --> 0:02:37.799 and growth across the other three businesses, and so it's 0:02:37.880 --> 0:02:40.680 nice to have a shining star, but seeing resilience on 0:02:40.760 --> 0:02:43.760 the more balance sheet sensitive businesses of our corporate bank 0:02:43.840 --> 0:02:45.760 and private bank is encouraging. 0:02:45.880 --> 0:02:48.640 Deutsche Bank CFO James von Molka added that he sees 0:02:48.680 --> 0:02:51.160 optimism and growth coming back to Europe. 0:02:51.280 --> 0:02:53.800 Well, Nathan, on this very busy morning, we also have 0:02:53.880 --> 0:02:57.079 a huge takeover to tell you about. BHP, the world's 0:02:57.200 --> 0:03:01.040 largest mining company, has proposed to takeover of Anglo American 0:03:01.360 --> 0:03:05.120 that values the smaller minor at almost thirty nine billion dollars. 0:03:05.320 --> 0:03:09.359 Bloomberg Commodities reporter Martin Ritchie says there's one primary reason 0:03:09.440 --> 0:03:10.160 for the tie up. 0:03:10.520 --> 0:03:11.840 This is all about copper. 0:03:12.200 --> 0:03:15.959 BHP is going to become the world's biggest copper miner, 0:03:16.160 --> 0:03:19.960 and that's because the miners are expecting a big wave 0:03:20.040 --> 0:03:22.760 of demand for copper, and we've seen over the past 0:03:22.800 --> 0:03:26.120 few years a number of quite big transactions and a 0:03:26.120 --> 0:03:28.840 lot of talk about how they want to gain exposure 0:03:28.880 --> 0:03:32.240 to copper. But this is the first really big deal 0:03:32.480 --> 0:03:33.200 in the sector. 0:03:33.560 --> 0:03:37.280 Bloomberg's Martin Richie says BHP's bid for Anglo could prompt 0:03:37.280 --> 0:03:39.320 other giants to make a move back. 0:03:39.320 --> 0:03:41.680 Here in the States, Karen, US chip making is getting 0:03:41.680 --> 0:03:45.200 another boost from the Biden administration. It is awarding Micron 0:03:45.280 --> 0:03:49.480 Technology up to thirteen point six billion dollars in grants 0:03:49.480 --> 0:03:52.680 and loans for new memory chip factories in the US. 0:03:53.000 --> 0:03:56.400 Micron has pledged about one hundred and twenty five billion 0:03:56.600 --> 0:03:59.520 into build four factories in New York State and a 0:03:59.560 --> 0:04:03.040 fifth in Idaho. President Biden will be in Syracuse for 0:04:03.120 --> 0:04:06.840 today's announcement and checking Micron shares in the early trade, 0:04:06.840 --> 0:04:08.720 they are little changed to the upside. 0:04:09.040 --> 0:04:11.400 Well, Nathan, Let's turn out to a case that could 0:04:11.440 --> 0:04:15.240 have major implications for the presidential race. Former President Donald 0:04:15.280 --> 0:04:18.200 Trump continues to insist that he is immune from criminal 0:04:18.240 --> 0:04:22.400 prosecution for trying to overturn the twenty twenty election. Now 0:04:22.440 --> 0:04:25.440 the Supreme Court will have arguments today on what exactly 0:04:25.480 --> 0:04:29.920 constitutes a presidential act. Bloomberg's Amy Morris has more from Washington. 0:04:30.200 --> 0:04:32.960 Donald Trump argues the charges are all based on actions 0:04:33.000 --> 0:04:36.560 he took in his official capacity as president. Prosecutors say 0:04:36.680 --> 0:04:39.119 nothing that Trump did in trying to remain in power 0:04:39.200 --> 0:04:42.920 despite his loss was conduct of the office. The justices 0:04:43.160 --> 0:04:45.360 have to try to draw a line between these views. 0:04:45.560 --> 0:04:48.600 There's not much guidance. An official act of the presidency 0:04:48.760 --> 0:04:52.240 isn't a term rooted in the Constitution nor criminal statute. 0:04:52.560 --> 0:04:55.400 And even if Donald Trump is entitled to some immunity 0:04:55.400 --> 0:04:58.719 for official acts, the federal government maintains there's no basis 0:04:58.720 --> 0:05:02.120 for his claim for immunity. Meanwhile, the clock is ticking, 0:05:02.200 --> 0:05:05.560 giving Special counsel Jack Smith only a narrow window to 0:05:05.600 --> 0:05:08.080 put the former president in front of a jury before 0:05:08.160 --> 0:05:11.240 voters go to the polls. November fifth, in Washington, Amy 0:05:11.279 --> 0:05:12.359 Moore as Bloomberg Radio. 0:05:12.440 --> 0:05:14.440 All right, Amy, thanks for all the Supreme Court. Here's 0:05:14.480 --> 0:05:17.200 those arguments. Former President Trump will be back before a 0:05:17.279 --> 0:05:20.800 Manhattan jury hearing more testimony in the criminal hush money trial. 0:05:21.080 --> 0:05:23.800 Bloomberg Law host June Grosso has the latest one that 0:05:23.839 --> 0:05:24.479 from New York. 0:05:24.760 --> 0:05:28.200 David Pecker, the former publisher of The National Inquirer, will 0:05:28.200 --> 0:05:31.279 be back on the witness stand today. On Tuesday, he 0:05:31.360 --> 0:05:34.360 told the jury about how he killed stories about Donald 0:05:34.400 --> 0:05:40.080 Trump's extramarital affairs to boost his twenty sixteen presidential campaign. Today, 0:05:40.160 --> 0:05:43.560 prosecutors will likely ask him about the hush money payments 0:05:43.600 --> 0:05:46.440 to Stormy Daniels. The judge is not yet ruled on 0:05:46.480 --> 0:05:50.680 the prosecution's motion to hold Trump in contempt for violating 0:05:50.720 --> 0:05:53.719 the gag order on commenting on witnesses in the case. 0:05:54.080 --> 0:05:56.640 In New York, June Grosso Bloomberg Radio. 0:05:56.640 --> 0:05:58.400 All right, June, thank you well. There is a new 0:05:58.440 --> 0:06:01.159 criminal case tied to the two twenty election. A grand 0:06:01.240 --> 0:06:05.120 juri in Arizona has issued felony counts against eighteen Republicans, 0:06:05.360 --> 0:06:09.120 including seven attorneys or aids to the Trump campaign, over 0:06:09.120 --> 0:06:12.320 their efforts to overturn President Biden's win in the state. 0:06:12.640 --> 0:06:15.719 The defendants include former Trump attorney Rudy Giuliani and ex 0:06:15.760 --> 0:06:19.279 White House Chief of Staff Mark Meadows. Former President Trump 0:06:19.360 --> 0:06:22.280 is not facing charges in this case, but he is 0:06:22.360 --> 0:06:24.960 named as an unindicted co conspirator. 0:06:25.360 --> 0:06:28.440 Meanwhile, Caring the Arizona House has voted to repeal that 0:06:28.560 --> 0:06:33.120 state's eighteen sixty four abortion law. Bloomberg Zed. Baxter has 0:06:33.120 --> 0:06:33.640 that story. 0:06:34.000 --> 0:06:37.000 The almost complete ban on abortions only to save the 0:06:37.080 --> 0:06:39.599 mother's life could go into effect as early as June 0:06:39.680 --> 0:06:44.000 eighth if it isn't repealed. Republicans have narrow majorities in 0:06:44.040 --> 0:06:48.360 both chambers, but recent uproars have obviously changed some minds, 0:06:48.440 --> 0:06:51.000 and so in the House. The State Senate could take 0:06:51.080 --> 0:06:54.839 up the repeal vote next week. Two Republicans already say 0:06:54.880 --> 0:06:58.559 they are supporting it. Governor Katie Hobbs has been urging 0:06:58.600 --> 0:07:01.839 the repeal. This add to the heat of the issue 0:07:01.920 --> 0:07:05.320 nationally politically. Ed Baxter, Bloomberg Radio. 0:07:05.560 --> 0:07:10.640 All right, ed, thanks, and it's time now for a 0:07:10.640 --> 0:07:12.480 look at some of the other stories making news in 0:07:12.560 --> 0:07:15.520 New York and around the world. There's Michael Barr Michael, 0:07:15.520 --> 0:07:16.320 good morning. 0:07:16.080 --> 0:07:19.960 Good morning, Karen, Police yourselves. That's from New York City 0:07:20.000 --> 0:07:24.680 Mayor Eric Adams to protesters on college campuses. Pro Palestinian 0:07:24.720 --> 0:07:28.760 demonstrators have been calling on universities to separate themselves from 0:07:28.840 --> 0:07:33.400 companies supporting Israel's war in Gaza. Police have been making arrests. 0:07:33.640 --> 0:07:37.400 Critics of the protests say Jewish students have become the 0:07:37.480 --> 0:07:41.760 victims of violent threats. Mayor Adams says that he's even 0:07:41.840 --> 0:07:46.480 seen some protesters express support for the militant group Hamas Fudemus. 0:07:46.520 --> 0:07:50.880 Speech is something that is constitutionally protected, and you can 0:07:50.920 --> 0:07:54.160 be correct constitutionally, but it's in moral. 0:07:53.880 --> 0:07:57.119 To see some of the terminologies that's been used. Mayor 0:07:57.160 --> 0:08:00.360 Adams told WABC, there is no room for hate in 0:08:00.400 --> 0:08:04.880 our city. Yesterday, House Speaker Mike Johnson visited Columbia and 0:08:05.000 --> 0:08:09.000 called on the university's president to resign, accusing Minot Schaffik 0:08:09.440 --> 0:08:13.000 of giving in to pro Palestinian protesters who have reportedly 0:08:13.040 --> 0:08:17.280 threatened Jewish students. Speaker Johnson told a booing crowd on 0:08:17.320 --> 0:08:21.040 the campus he supports free speech, but defends Jewish students 0:08:21.080 --> 0:08:21.920 and Israel. 0:08:22.360 --> 0:08:26.040 This is dangerous. This is not free expression, This is 0:08:26.080 --> 0:08:30.840 not First Amendment. They are threatening, intimidating, saying that they 0:08:30.880 --> 0:08:33.280 will take violence upon Jewish students. We met with Jewish 0:08:33.280 --> 0:08:35.760 students who are in fear. They can't come on campus, 0:08:35.760 --> 0:08:37.840 they can't study for their final exams. 0:08:38.600 --> 0:08:41.839 At the University of Southern California, police began detaining pro 0:08:42.000 --> 0:08:47.000 Palestinian student protesters without incident. The arrests occurred hours after 0:08:47.080 --> 0:08:50.840 police at the University of Texas and Austin aggressively took 0:08:50.880 --> 0:08:54.080 more than thirty demonstrators. This student says he thinks the 0:08:54.120 --> 0:08:56.440 police presence escalated the protests. 0:08:56.760 --> 0:08:59.280 This is a vault way further than it has because 0:08:59.320 --> 0:09:01.840 of the speech. I've talked to a few kids here 0:09:02.160 --> 0:09:03.760 my crimes, Like I was like, oh, I didn't know 0:09:03.800 --> 0:09:06.240 you were like, you know, you know, supporting Kalstad, and 0:09:06.240 --> 0:09:07.880 they're like, no, I just saw all the arrests and 0:09:07.920 --> 0:09:08.880 think this is crazy. 0:09:09.440 --> 0:09:12.719 The arrest came at the request of university officials and 0:09:12.920 --> 0:09:18.040 Texas Governor Greg Abbott. Representative Josh Gottheimer and other congressional 0:09:18.080 --> 0:09:21.760 members are seeking committee hearings on New York City's congestion 0:09:21.960 --> 0:09:25.320 pricing plan. The New Jersey Democrat is calling on a 0:09:25.320 --> 0:09:28.960 House committee to ask MTA Chief General Lieber to testify 0:09:29.000 --> 0:09:31.880 about the revenue expected to be collected from the new 0:09:31.960 --> 0:09:35.160 feed global news twenty four hours a day and whenever 0:09:35.200 --> 0:09:37.880 you want it with Bloomberg News. Now, I'm Michael Barr. 0:09:37.920 --> 0:09:38.880 This is Bloomberg. 0:09:38.920 --> 0:09:45.840 Karen Sor right, Michael Barr, thank you, and it's time 0:09:45.880 --> 0:09:48.880 now for the Bloomberg Sports Update with John stash Hour. 0:09:49.000 --> 0:09:51.440 John, Good morning, Good morning care. In the NFL draft, 0:09:51.480 --> 0:09:53.040 you used to always take place in New York, then 0:09:53.080 --> 0:09:55.640 they begin moving around the country. It starts tonight in 0:09:55.720 --> 0:09:58.959 Detroit with the Chicago Bears on the clock. Unless everyone 0:09:59.040 --> 0:09:59.400 is wrong. 0:10:00.080 --> 0:10:00.200 LT. 0:10:00.400 --> 0:10:01.440 Caleb Williams, who. 0:10:01.280 --> 0:10:04.280 Won the Heisman Trophy at USC Washington and New England 0:10:04.280 --> 0:10:07.320 had the second and third picks. Both also need a quarterback. 0:10:07.360 --> 0:10:10.280 Big question is will the Giants draft to QB, either 0:10:10.320 --> 0:10:12.760 with the sixth pick or after moving up, or will 0:10:12.760 --> 0:10:16.560 they take a wide receiver to help incumbent QB Daniel Jones. 0:10:16.640 --> 0:10:19.840 Jets pick tenth certainly need offensive help, maybe a tackle 0:10:19.920 --> 0:10:22.560 or if he's still there, Georgia tight end brock Bowers. 0:10:22.600 --> 0:10:25.280 There are mock drafts that don't have a single defensive 0:10:25.320 --> 0:10:28.200 player going in the top ten. At Stadium, Aaron Judge 0:10:28.200 --> 0:10:30.839 at the plate first inning, and it apparently had struck out, 0:10:30.880 --> 0:10:34.120 but a buck was called. The at bat continued. 0:10:34.040 --> 0:10:35.000 Judge back in the box. 0:10:35.040 --> 0:10:37.320 The pitch get in the air deep right field. 0:10:37.360 --> 0:10:39.760 Butler looking back at the wall. 0:10:39.640 --> 0:10:42.280 It is got a home run, Howard. 0:10:42.120 --> 0:10:44.400 Judge back in the batter's box. 0:10:44.800 --> 0:10:48.640 Extended life then he parks it into the port right field. 0:10:48.480 --> 0:10:51.760 On wfan later home run for Anthony Rizzo and Juan Soto. 0:10:51.880 --> 0:10:54.559 Yankees beat the A seven to three. Four game series 0:10:54.640 --> 0:10:57.000 ends tonight. The Mets road trip ended with an eight 0:10:57.040 --> 0:10:59.880 to two win at San Francisco. Francisco Lindor off to 0:10:59.920 --> 0:11:03.200 the miserable start, busted out pair of two run homers, 0:11:03.280 --> 0:11:06.000 upset in Boston. With the Celtics lost only four times 0:11:06.040 --> 0:11:09.360 all season, the Miami Heat, playing without the injured Jimmy Butler, 0:11:09.440 --> 0:11:12.480 drained in twenty three to three pointers and won one 0:11:12.600 --> 0:11:15.439 eleven one oh one, tying the series at one. Oklahoma City, 0:11:15.720 --> 0:11:18.199 who won Game one from New Orleans by two points, 0:11:18.200 --> 0:11:22.080 won Game two by thirty two. Nixon Sixers play Game 0:11:22.120 --> 0:11:25.240 three tonight in Philadelphia. The Nets formally introduced a new coach, 0:11:25.320 --> 0:11:29.120 Jordi Fernandez, has been assistant in Sacramento Stanley Cup playoffs. 0:11:29.160 --> 0:11:32.280 Three wins by road teams Boston four to two in Toronto, LA, 0:11:32.400 --> 0:11:35.240 five to four in overtime at Edmonton, and Vegas three 0:11:35.280 --> 0:11:37.720 to one at Dallas. The Stars top seeds in the West, 0:11:37.720 --> 0:11:41.080 but now trailing their series too nothing. John Stanshewer, Bloomberg 0:11:41.120 --> 0:11:42.400 Sports Karen and Ncoln. 0:11:44.600 --> 0:11:48.720 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, 0:11:48.840 --> 0:11:51.720 and around the world on Bloomberg dot com and the 0:11:51.760 --> 0:11:56.280 Bloomberg Business app. This is Bloomberg Daybreak. Good morning. 0:11:56.320 --> 0:11:59.959 I'm Nathan Hager, Ametta miss is dragging tech stocks law 0:12:00.160 --> 0:12:03.000 or this morning. The Facebook and Instagram parent company did 0:12:03.040 --> 0:12:05.240 come in with a slight beat on revenue in the 0:12:05.280 --> 0:12:07.640 first quarter, but it's the outlook for sales in the 0:12:07.640 --> 0:12:11.160 current quarter and promise of big spending for the rest 0:12:11.200 --> 0:12:13.880 of this year that is raising new questions and perhaps 0:12:13.880 --> 0:12:17.480 some investor concerns about CEO Mark Zuckerberg's plans beyond the 0:12:17.559 --> 0:12:18.400 social network. 0:12:18.440 --> 0:12:18.880 For more. 0:12:19.280 --> 0:12:22.720 We're joined by Bloomberg's Alex web Alex good morning, not 0:12:22.800 --> 0:12:25.319 so good a morning if you are a meta investor. 0:12:25.360 --> 0:12:27.720 It does seem like this idea of spending up to 0:12:27.800 --> 0:12:30.160 forty billion dollars on campex for the rest of this 0:12:30.240 --> 0:12:31.880 year is really spooked investors. 0:12:33.880 --> 0:12:37.200 Sorry, excuse me, yes, absolutely, Look, there are two pieces 0:12:37.200 --> 0:12:39.760 of this, maybe three pieces that it's spent in the 0:12:39.760 --> 0:12:42.559 past year or so, telling investors that they are now 0:12:42.600 --> 0:12:47.240 on efficiently run company, they care about costs. The sort 0:12:47.240 --> 0:12:50.360 of growth at any expense is not their priority anymore. 0:12:50.440 --> 0:12:53.360 They're really looking at shareholder value. Then, not only are 0:12:53.360 --> 0:12:56.040 we seeing actually a slight change of tack on that 0:12:56.120 --> 0:12:59.480 they're pushing some earnings out in order to invest in 0:13:00.080 --> 0:13:03.640 artificial intelligence and AI infrastructure, but there's also on top 0:13:03.679 --> 0:13:08.360 of that a slight softening in revenue. The current quarter 0:13:08.400 --> 0:13:10.600 are in coming in a little bit below what the 0:13:10.640 --> 0:13:13.880 market had been expecting. So the signal they're giving the 0:13:13.920 --> 0:13:17.080 market is that actually were a slightly longer duration stock 0:13:17.360 --> 0:13:20.400 than you thought we were. In the current interest rate 0:13:20.480 --> 0:13:23.880 environment and in appetite for risk, that is not something 0:13:23.920 --> 0:13:26.079 that investors have a huge amount of appetite for, or 0:13:26.080 --> 0:13:27.719 at least not the same appetite that they might have 0:13:27.760 --> 0:13:28.640 had a few years ago. 0:13:29.040 --> 0:13:31.720 Certainly seeing that in terms of the action in the 0:13:31.760 --> 0:13:33.959 stock this morning, I mean, what do you make of 0:13:34.040 --> 0:13:38.319 Mark Zuckerberg's patients or call for patients this time around 0:13:38.400 --> 0:13:41.520 on AI investment? Of course, there's been so much focus 0:13:41.920 --> 0:13:46.559 on AI monetization as we head through this tech earnings quarter. 0:13:47.800 --> 0:13:49.280 I mean, there are a few different ways of looking 0:13:49.320 --> 0:13:51.320 at this. Is that the nature of the messaging, which 0:13:51.360 --> 0:13:53.880 is that it was pretty abrupt, right nobody had. Well, 0:13:54.040 --> 0:13:56.360 clearly the market hadn't seen this coming. He could have 0:13:56.400 --> 0:14:00.520 done a better job, perhaps from a communications perspective, warming 0:14:00.559 --> 0:14:02.040 the market up to this idea. There might be a 0:14:02.080 --> 0:14:08.240 little bit more expense than previously anticipated. Then there's also 0:14:08.400 --> 0:14:11.640 just the general corporate strategy piece, and it's very temptate. 0:14:11.800 --> 0:14:15.640 It's very tempting, presumably if you're running meta to look 0:14:15.679 --> 0:14:18.000 at the fact that you've got something like fifty billion 0:14:18.040 --> 0:14:21.400 dollars in free cash flow and say, well, I should 0:14:21.440 --> 0:14:23.480 spend that on growing now. That is what Facebook has 0:14:23.520 --> 0:14:26.440 been able to do for much of its existence, including 0:14:26.480 --> 0:14:28.480 as a public company over the past decade or so. 0:14:29.280 --> 0:14:31.600 We are now in a different sort of environment than 0:14:31.640 --> 0:14:34.920 the one in which Zuckerberg grew up in as a CEO. 0:14:35.960 --> 0:14:41.000 That is perhaps an adaptation that he perhaps isn't making 0:14:41.360 --> 0:14:44.120 as readily as some of his peers, or indeed some 0:14:44.160 --> 0:14:45.600 of his investors would like. 0:14:46.480 --> 0:14:50.560 Is there room in the ad business, the ad environment, 0:14:51.000 --> 0:14:55.360 for the ambitions that Mark Zuckerberg is laying out for 0:14:55.440 --> 0:14:56.760 this kind of capex? 0:14:59.280 --> 0:15:03.320 The ad market is clearly recovering. As when you know, 0:15:03.320 --> 0:15:06.440 when the economy recovers, marketing spends tend to increase. We 0:15:06.520 --> 0:15:09.080 have seen that with Facebook that they are growing at 0:15:09.120 --> 0:15:14.400 the fastest clip in you know, two or three years. Nonetheless, 0:15:15.400 --> 0:15:18.440 one of the big questions, big extant questions with AI 0:15:18.920 --> 0:15:21.280 is kind of how do you monetize it if you 0:15:21.320 --> 0:15:23.320 have an ad tech business. One of the things with 0:15:23.480 --> 0:15:26.600 say Google Search or with Facebook is you're not spear 0:15:26.680 --> 0:15:29.280 fishing right you go in, You just kind of you 0:15:29.360 --> 0:15:33.520 are fed lots of different content. Even in Google Search, 0:15:33.560 --> 0:15:35.480 you search for something and you might go all the 0:15:35.520 --> 0:15:37.640 way to the bottom of page or several pages deep 0:15:37.680 --> 0:15:40.520 to find the thing that you want. With AI, you're 0:15:40.560 --> 0:15:43.680 asking a very specific question and expecting to get a 0:15:43.760 --> 0:15:46.920 very specific answer. The business models for how then to 0:15:47.000 --> 0:15:50.480 monetize that are still really being worked out, So there 0:15:50.560 --> 0:15:52.800 is a lot of expense happening here. It might drive 0:15:52.920 --> 0:15:57.760 user engagement, we have yet to see entirely what the 0:15:57.800 --> 0:15:59.280 consumer facing business model is. 0:15:59.560 --> 0:16:02.640 This is Bloomberg Daybreak Today, your morning brief on the 0:16:02.680 --> 0:16:06.080 stories making news from Wall Street to Washington and beyond. 0:16:06.360 --> 0:16:09.120 Look for us on your podcast feed at six am 0:16:09.200 --> 0:16:12.840 Eastern each morning, on Apple, Spotify, and anywhere else you 0:16:12.920 --> 0:16:14.080 get your podcasts. 0:16:14.200 --> 0:16:16.920 You can also listen live each morning starting at five 0:16:16.960 --> 0:16:19.560 am Wall Street Time on Bloomberg eleven three to zero 0:16:19.600 --> 0:16:22.480 in New York, Bloomberg ninety nine to one in Washington, 0:16:22.560 --> 0:16:25.440 Bloomberg one oh six to one in Boston, and Bloomberg 0:16:25.520 --> 0:16:27.200 ninety sixty in San Francisco. 0:16:27.560 --> 0:16:30.720 Our flagship New York station is also available on your 0:16:30.760 --> 0:16:36.200 Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus. 0:16:36.240 --> 0:16:39.800 Listen coast to coast on the Bloomberg Business app, seriusxmb 0:16:40.000 --> 0:16:43.720 iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager 0:16:43.800 --> 0:16:45.080 and I'm Karen Moscow. 0:16:45.200 --> 0:16:47.920 Join us again tomorrow morning for all the news you 0:16:48.080 --> 0:17:01.200 need to start your day right here on Bloomberg Daybreak